Brands key to India's ecommerce battles

18 June 2014

NEW DEHLI: Global fashion brands are playing a vital role in the current development of India's ecommerce sector, as online retail platforms seek to differentiate themselves on factors other than price.

"It's about the evolution of consumer choices", according to Arun Chandra Mohan, CEO and co-founder of Jabong, which has just added two UK high street names – River Island and Blue Saint – along with Spain's Mango to its catalogue of more than 1,000 brands.

"Increasingly, people are looking for fast fashion and international brands," he added, and the company will therefore continue to scale up its association with such properties.

Myntra, Jabong's main rival in this market with some 650 brands available, is following a similar path, having recently agreed exclusive distribution deals with brands such as Scotch & Soda, from Holland, and Desigual, from Spain.

Santosh Desai, the managing director and CEO of brand management business Future Brands India pointed that established portals like Jabong and Myntra offered significant benefits to overseas brands.

"There is an online environment that has already been created and ready for these brands to take advantage of. The international player does not fear its brand will get diluted in any way by listing online with these portals," he told the Business Standard.

Further, it was easier for them to test the market without having to incur heavy costs – these were instead falling on the online retailer which was paying for its exclusivity in having to buy and stock large inventory.

But not all online fashion retailers are looking for such arrangements. Players like Snapdeal, Shopclues and Limeroad are trying to strike a balance between style and pricing, said the Business Standard. The likes of Myntra and Jabong are targeting an "upper-middle class, fashion-conscious consumer who goes all out for style".

The stakes are high: Flipkart, which recently acquired Myntra, has announced that it will invest another $100m in the fashion category. And there is widespread expectation that Amazon, a relative newcomer to Indian ecommerce, will expand its fashion offer.